Madhu Khanna, University of Illinois, Urbana-Champaign
Papers:
Abstract:
Expansion of biofuel production, in the form of corn ethanol and biodiesel, in the United States, has raised concern regarding its land-use change effects which has implications for the carbon mitigation potential of biofuels. Despite numerous studies over more than a decade there remains significant uncertainty about the extent to which observed land use change in the US can be attributed directly to biofuel production. Quantifying the magnitude of the induced land use change by biofuels remains a critical issue for policy that seeks to differentiate among biofuels based on their carbon intensity. This presentation will discuss the scientific challenges in quantifying the land use change by biofuels precisely and the sources of uncertainty in estimates and present findings from recent studies using both econometric and simulation modeling techniques.
Bio:
Dr. Madhu Khanna is the ACES Distinguished Professor of Environmental Economics in the Department of Agricultural and Consumer Economics and Alvin H. Baum Family Chair and Director of the Institute for Sustainability, Energy, and Environment, at the University of Illinois at Urbana-Champaign. She received her Ph.D. from the University of California at Berkeley. Her research is at the intersection of agricultural, energy and environmental economics and includes analysis of the land use and environmental effects of bioenergy, the potential for climate smart agriculture and digital farming practices and effectiveness of alternative policy approaches. Her research has led to more than 150 peer-reviewed publications that are widely cited. She has served on the USEPA Science Advisory Board for 10 years and as a Chair/member of review panels for NIFA, USEPA and NSF and as a member of USDOE Technical Advisory Committee. She has served on the editorial boards of several prestigious disciplinary and interdisciplinary journals. She is a University of Illinois Scholar, a Stanford Woods Institute of Environment Leopold Leadership Fellow and a Fellow and past President of the Agricultural and Applied Economics Association.
Summary:
Focus: challenges of biofuel production in US
Ethanol (corn: 40% used) 10% blends in fuels
Biodiesel (soybeans: 50% used) 5-20% blends in regular fuels
Concerns with biofuels
Biofuel production competes with crops for food
Current techniques
Newer techniques try to use non-food portions of crop plants (residues) but this is challenging because of the higher cellulose content
Currently not yet cost-competitive
Food prices have increased in 2008 and 2012 due to this competition, and the rising price of oil
High value of biofuels can incentivize conversion of noncropland and forest land to agriculture, which loses loses a lot of forest and soil carbon
Recently food prices have increased due to this competition, especially with rising price of oil
High value of biofuels incentivizes conversion of forest land to agriculture, which loses a lot of forest and soil carbon
Satellite analyses show significant amount of conversion of non-crop land to crop land
Conservation Reserve Program (CRP) (keeps land out of agricultural cultivation) has gone from 35m acres to 25m acres
Key question: how much of the expansion of cropland was due to biofuels (as opposed to changes in crop prices and other causes)?
Land use impacts of biofuels
Raises domestic demand for crops, incentivizes increase in supply
Switching crops on same land
Bringing non-cropland into production
Leaving CRP
Changes in management to increase yields
Crop rotation, more fertilizer
Reduced exports
Reduced demand for feed/food (due to higher prices)
Alternatives:
Native grasses: most don’t grow fast enough, potential damage to biodiversity
The faster growing ones (poplar, willow, eucalyptus) are promising but geographically limited
Forest residues: also promising but also controversial because of potential biodiversity damage
Scientific challenge: construct the causal model of land use to understand the impact of biofuels
Counterfactual model analysis: econometrically estimate the land use in absence of biofuel trends
Panel data approach
Total crop acreage and corn acreage in US 2003-2014
Build linear model that predicts corn acreage and total crop acreage based on
Inputs:
Proximity to biorefinery
Crop prices
Fertilizer price index
Population density
…
Fixed effect terms
Find that
Crop acreage is mostly inelastic to crop prices (e.g. 1% increase because of biorefinery proximity, .5% due to increased prices)
Crop acreage varies a lot due to overall crop demand and crop yields (need less land if yield increases)
Land needs for million gallons ha been dropping over time
Challenges:
Data coverage of crops/location is limited (surveys or satellite estimates 2008-Present in Cropland Data Layer)
Little data for how crops are used
Don’t know land productivity or how land was used before conversion to cropland
Simulation model analysis: simulation of entire agricultural value chain to understand impact of various stimuli
Biofuel and Environmental Policy model (BEPAM)
Calibrated on data <2007
Run to predict 2007-2018
Models different economic sectors, agricultural activities and their economic interactions
Ran scenarios for possible cropland conversions under different trends for conversion (e.g. pastureland is/isn’t converted)
Elasticity of acreage to crop price
Need .5-1.5 million acres for a billion gallons of biofuels (mean=.7), compared to ~90 million acres used for corn in US
Carbon intensity of corn ethanol 45 gCO2/MJ (19%-41% savings compared to gasoline)
Fertilizer, crop management, transportation emissions
Bigger modeling picture
It would be valuable to model larger portions of the bioeconomy and different feedstocks
Data availability on possible feedstocks and industrial processes is limited
Collaborations with domain-specific modelers (crop yield, pyrolysis process, etc.) is key